Keeping Tabs on Obama’s Climate Push As House Moves Forward with Legislation

Darren Samuelsohn — May 11, 2009

With President Obama and key congressional leaders seeking passage this year of global warming legislation, journalists have a great opportunity to explain the complexities of the issue to their readers.

But reporters must be careful too, as climate policy doesn’t fit neatly into a simple storyline of he said/she said. My editor likes to say that the climate debate is just as contentious as the issues facing the Middle East. Indeed, this is a debate filled with nuance, with more than two sides vying for coverage.

Here are some important points for the media to keep in mind as the U.S. House considers climate legislation at the center of Obama’s energy and environmental agenda:

A little history – This is the first time that the House of Representatives has ever tried to move cap-and-trade legislation. It won’t be easy for many reasons. The idea of capping greenhouse gas emissions and creating a $2 trillion new market rivals the New Deal and the Marshall Plan in overall size and in its far-reaching consequences. We’re talking about changing the very ways we travel, work, and live.

Lawmakers tried to get started in the late 1990s, but past bills have faltered for a lack of votes and presidential support. Obama now wants legislation on his desk, and he’s got friendly faces on both sides of the Capitol who say they will respond this year.

But Obama and his congressional allies face opposition from regional interests – Democratic and Republican – who are not so keen on making such dramatic changes to U.S. energy and environmental policy, especially during a global recession. So there are no promises this bill will make it all the way across the finish line this year, and much of the smart money appears to be leaning against passage and enactment in 2009.

Yet even if legislation dies in 2009, it won’t be the end of the issue. Obama still has three-plus years left in his first term. Democratic Party leaders in the Senate and the House, with strong Democratic majorities, say they support action, and cross sections of industry interests, from electric utilties to autos to chemical companies, are supporting climate legislation. The international community also is looking to the United States for leadership as it tries to come up with a new global accord this December in Copenhagen. And don’t forget that absent a new federal law, more than two dozen states will continue to implement their own climate programs.

Allowances – One of the trickiest tasks in writing cap-and-trade legislation involves how to divvy up the valuable emission credits that companies must turn in annually for compliance with the law. The allowances will be worth hundreds of billions of dollars once the government puts a price on emitting greenhouse gas emissions. That exact value remains at this point to be determined … and it’s a critical unknown.

So Congress can either give the allowances away for free or it can auction them off.

Obama campaigned last year saying he’d support a 100 percent auction. In his annual budget submission, the President said he’d use the revenue to pay for his middle class tax cuts and for research and development of low-carbon energy technologies.

But some in Congress have other ideas. Some legislators are planning to follow the approach in the 1990 Clean Air Act amendments, when lawmakers handed out the permits for free to coal-fired power plants based on their historic emission levels. This time around, electric utilities are requesting that the credits find their way into the hands of the local distribution companies that service energy customers directly. The country’s investor-owned utilities are on board with this approach, including Duke Energy, PSEG, and American Electric Power.

Even with Obama supporting an auction, Democrats who want to pass cap-and-trade legislation say they are convinced they will need to give away some of the credits to win over skeptical lawmakers.

Economic studies – Reporters need to be extremely careful dealing with price tags. Modeling is abundant, and everyone with a stake in the debate is running their own numbers. For instance, Charles River and Associates, in studies for the U.S. Chamber of Commerce, National Association of Manufacturers, and other industry interests, produced a very conservative cost estimate that drives up the overall costs of a cap-and-trade program. Environmental groups use their own rosy assumptions about energy technology development, and hence their costs are lower.

There are also studies by U.S. EPA and the Energy Information Administration, and these too deserve scrutiny. During the Bush administration, agency officials emphasized how little the United States could really do given the rising emission rates from around the world. By contrast, Obama’s staff says the studies showcase how their policies would be a boon to low-carbon energy technologies.

Ultimately, no one study can show what the costs will truly be. The Pew Center on Global Climate Change has some fair-minded economists on staff who have briefed reporters in the past on the proliferation of economic models, and they should be turned to in a pinch.

Also worth noting: the costs of inaction seldom get factored into the equation. That means the price tag doesn’t include the more intense hurricanes striking Florida or the Gulf Coast, or changes in wine growing regions or in recreation. EPA is trying to update its modeling to take these costs into account. For now, many independent observers say the best figures come from Sir Nicholas Stern, the British economist who reported in 2006 that the benefits of action outweigh the costs five to one.

U.S. EPA regulations – The federal government also has the power to write climate rules on its own under authorities existing in the current Clean Air Act. Last month, EPA declared greenhouse gas emissions as a threat to public health and welfare. It was a decision more than 10 years in the making, and spawned by an April 2007 Supreme Court decision in Massachusetts v. EPA.

That 5-4 opinion told the Bush EPA to reevaluate its decision on the science surrounding climate change. With the Bush administration’s EPA having run out the clock without issuing a ruling, the whole issue has landed in Obama’s lap.

Going forward, EPA now must decide just how far it needs to go to regulate for greenhouse gases. Reporters should be careful when they hear industry-driven concerns about EPA’s taking away backyard barbeques or raiding the local Dunkin Donuts. The agency’s true focus is going instead to be on power plants, cars, and other “major” sources of emissions. And while it is certainly possible for any citizen in the country to file a lawsuit trying to control smaller sources, Obama officials insist they will be flexible as they write the climate rules. Of course, Obama also would prefer to let Congress pass a climate law, and take this whole hot potato out of EPA’s hands.

Whether that in fact happens in 2009, 2010 … or perhaps even later … is a riddle that is being played-out in the halls of Congress, in the Executive Branch, and along Washington’s K Street and Pennsylvania Avenue “lobbyist rows” now and over the coming months.

Darren Samuelsohn is a Washington-based reporter for E&E News’ Greenwire and Environment & Energy Daily. He has been covering the policy and politics of climate change since 2001.

One Response to Keeping Tabs on Obama’s Climate Push As House Moves Forward with Legislation

This is a very well-written article. It points out the fact that there is a difference between a brand new “climate law” approach to CO2 regulation and a “Clean Air Act” approach using the EPA. But the article doesn’t go deeply enough into the difficulties that each of the two strategies presents.

Most people think that the EPA already has sufficient legislative authority to clamp down on CO2 and drive the American coal industry into oblivion, but the recent Obama decision not to use the Endangered Species Act for that purpose is very enlightening and instructive. It indicates that President Obama is not as dedicated to “the cause” as most climate change enthusiasts would like to believe he is. In fact, it indicates that he may be so dedicated to the use of common sense that he will insist that the entire question of anthropogenic global warming be examined in detail, for the first time.

He would do this by driving the carbon dioxide “pollutant” question through the Clean Air Act fact-finding and rulemaking procedures required to establish carbon dioxide as a “criteria polloutant” under the Act. Such careful attention to facts would not be necessary if a brand new “Law of the Climate” statute or treaty were to be presented either to Congress as a whole, in the case of a statute, or to the Senate, in the case of a treaty. And with a statute or treaty, no one would be able to take an appeal to the courts prior to enforcement.